Cabot Stock of the Week Issue: June 30, 2025

Quick programming note: I will be on vacation with my family next week, so there will be no Stock of the Week issue next Monday, July 7. I will be back at it the following week, July 14. If anything major happens that warrants action in one or more of our stocks, I will send out an alert. I hope everyone has a wonderful Fourth of July!

Now, on to the market. It’s at all-time highs! Did I think that was going to be the case a week ago when the U.S. had just bombed Iran’s nuclear facilities and it appeared a major war was in the offing? No. But the tensions de-escalated as quickly as they escalated, and Wall Street has taken that as a green light to buy stocks again after a month or so of mostly sideways action. Suddenly, the S&P 500 is up 5% through the first half of the year – which is pretty normal historically. Stocks have truly been climbing the “Wall of Worry” of late, and it’s a good reminder that headlines don’t matter, charts do. And for all of 2025’s ups and downs, stocks have continued to rise, and the bull market is very much intact.

So today, we add a beaten-down large-cap tech stock that has started to show serious signs of life. Clif Droke flagged it as a potential turnaround story in his Cabot Turnaround Letter, and now we add this very familiar name to our portfolio.

Here it is, with Clif’s latest thoughts.

New Recommendation

Intel Corp. (INTC)

In recent years, microchip makers have had more than their fair share of challenges, resulting in a very uneven performance for some of the industry’s largest companies.

In the wake of the 2020-2023 global chip shortage, for instance, many tech companies grabbed whatever supply they could, leading to stockpiling—and an eventual glut in NAND and DRAM memory chips in particular—which weighed heavily on the stock prices for many chip firms.

Lately, however, a recovery has taken hold not only in the NAND and DRAM markets, but in the broader semiconductor space. According to the Semiconductor Industry Association (SIA), global semiconductor sales increased by double digits in Q1 on a year-over-year basis, marking a solid turnaround for the overall industry.

But while big-name chip companies like Nvidia (NVDA) and Broadcom (AVGO) have seen their stock prices hit new highs of late, a few high-profile chip makers have conspicuously lagged their peers. One of them is Intel (INTC), which has been a rebound candidate of special interest for the Cabot Turnaround Letter since last August.

It’s easy enough to understand the market’s lack of love for the once-mighty chip giant: Its woes accelerated in early 2024 when the shares fell out of bed soon after hitting a peak at 50. The stock’s underperformance was blamed on a variety of factors, including underperformance in Intel’s crucial data center segment, along with a failure to compete in the burgeoning AI market, where competitors like Nvidia have taken the lead.

The result was a plunge in revenues, even as costs increased for its foundry business, resulting in major operating losses. Adding to these woes was the ouster of then-CEO Pat Gelsinger last December, which underscored investors’ lack of confidence in the company’s prior turnaround plans.

Moreover, the recent trend towards AI and cloud computing favors companies that focus on producing graphics processing units (GPUs), AI accelerators and other specialized hardware. This, in turn, has placed the CPU-focused Intel in a position where it must play catch-up to the rest of the industry.

But just when things looked darkest for Intel, a new light appeared on the horizon in the form of Silicon Valley veteran Lip-Bu Tan, appointed as new CEO in March.

Tan has established a successful track record as both a startup investor and a turnaround CEO, having led the successful rebound of chip design software leader Cadence (CDNS). For the task ahead of him at Intel, Tan’s strategic focus is on revitalizing the firm’s manufacturing strength, improving the foundry business, exploring robotics and expanding into AI, while also streamlining operations and developing new products.

Under CEO Tan, Intel is already positioning itself as a key provider of both hardware and software solutions that enable the widespread adoption of generative AI across various industries and ecosystems, which Wall Street is beginning to notice.

Specifically, institutional investors believe that Intel can benefit from its solutions for deploying and scaling generative AI applications on the data center level, as well as for industries like retail and healthcare.

While there are still concerns regarding the company’s liquidity position, under Tan’s leadership, Intel has been working to deliver a competitive AI platform and spinning off non-core assets to restore stability and, in the words of one analyst, “help the company return to its past glory.” This is part of Intel’s bigger strategy under Tan of improving bandwidth and focusing resources. And he further aims to “eliminate bureaucratic obstacles and create an environment where breakthrough ideas can flourish” (his words).

With the proven leader Tan now at the helm of Intel’s foundry recovery plans, and as the firm’s AI accelerators gain more traction among its main competitors, the stock should finally begin showing stability. What’s more, the firm’s long-term AI strategy is shifting towards integrated rack-scale AI systems, with its Jaguar Shores product expected to ship in 2026, further providing legs for the turnaround.

As such, I have assigned INTC a Buy rating with an upside target of 50. BUY

Current Recommendations

Changes Since Last Week:

AbbVie (ABBV) Moves from Hold to Sell

Palomar Holdings, Inc. (PLMR) Moves from Buy to Sell

Two sells this week, as the improved market makes it easy to spot laggards and get rid of anything that just isn’t working. ABBV hasn’t been a disaster; it just has barely budged since we recommended it six months ago. PLMR has been more of a disappointment, so we’re giving it a quick hook. Almost everything else in our portfolio is working, especially AST SpaceMobile (ASTS) (new all-time highs), Airbus (EADSF) (new all-time highs), Banco Santander (SAN) and Carnival Corp. (CCL), to name a few.

Here’s what’s happening with all our stocks at the halfway point of 2025.

Updates

AbbVie (ABBV), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, didn’t budge this week and just isn’t getting the job done. We bought the high-yield biotech to start the year, and the stock has scarcely moved, up about 3% through the first half of the year. Let’s sell it and open up a spot for a stock with more upside. SELL

Agnico Eagle Mines (AEM), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was off 5.5% this week as gold prices slumped back below $3,300 an ounce with fears of an Iran war dissipating. I doubt the gold rally is over, however, as plenty of geopolitical and economic concerns remain, meaning gold will likely remain in favor as a flight-to-safety option. You could buy the dip, as shares are still above their late-May lows. BUY

Airbus (EADSF), originally recommended by Carl Delfeld in his Cabot Explorer advisory, took flight this week, advancing more than 8% to reach new all-time highs above 200! There was no major news for the company, but the combination of a strong market and ongoing bad news for rival Boeing (BA) conspired to send Airbus shares to new heights. The aircraft maker also recently secured $21 billion in new orders at the Paris Air Show. We now have a solid gain on this stock. If you don’t own it yet, I’d buy on dips of a few points after such a forceful run-up. BUY

AST SpaceMobile (ASTS), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, managed to tack on another couple points, from 47 to 49, as the stock has now nearly doubled in the last month! There was no news this week, and we took profits on half this position several weeks ago and are letting our remaining half ride. The stock is now up more than 300% since we added it to the portfolio less than a year ago! Considering the company hasn’t even opened for business and is still laying groundwork in building out its space-based, straight-to-smartphone internet service that’s the first of its kind, I think the stock has way more upside. But I’d be wary of a short-term pullback at these levels. If you haven’t run the register yet on at least a few shares, I’d do so now. HOLD HALF

Banco Santander (SAN), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was up about 1.5% this week and has now risen more than 80% for the year. The latest catalysts are two-fold, as Carl noted in his latest update: “Spain is now Europe’s fastest-growing major economy. Santander also announced it sold seven branches in Pennsylvania this week as it ramps up its digital strategy in America.” A break above resistance in the 8.3 area could send shares soaring again. BUY

BYD Co. Ltd. (BYDDY), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was down another point this week and is currently trading at its lowest level since April. The only news was that the company plans to invest $94 million in its electric bus service in Hungary, which would triple output. Hungary is a major hub in BYD’s European expansion, where a production plant is also being built. The China-based EV maker now sells as many cars in Europe as Tesla, and last year surpassed its more high-profile U.S. counterpart in sales, generating $107 billion in revenue and $5.6 billion in profits. The stock has gotten dinged of late after slashing prices by as much as 34% on 22 of its models in China. But for a company that does 90% of its business in its home country, China isn’t the problem, as BYD is running laps around Tesla and others there. Global expansion has been the only question mark. In April, BYD topped Tesla’s European sales for the first time. Now, it’s clear the company is doubling down on Europe. I’d buy this dip if you don’t already own the stock – or if you want to add to a position. I don’t think the stock will stay down long. BUY

Carnival Corp. (CCL), originally recommended by yours truly in my Cabot Value Investor advisory, is up 13% since reporting earnings last Tuesday. EPS came in at 35 cents, well ahead of the 24-cent estimate. Sales also beat estimates and, at $6.3 billion, were up 9% year over year. Net income, meanwhile, soared to $565 million, light years ahead of the $92 million in net income from Q2 a year ago. Because of the strong quarter, the company raised full-year guidance on net income by $200 million and nudged up EBITDA estimates from $6.7 billion to $6.9 billion. Customer deposits were at a record $8.5 billion in the quarter. All told, it was another excellent quarter for the company, and it has now nearly reached my 28 price target in Cabot Value Investor after less than two months! A pullback is possible, especially if the market cools, but this undervalued stock is finally playing catch-up to its sales, which are setting new records by the quarter as post-Covid cruise demand (my colleague Mike Cintolo is on one right now!) is through the roof. BUY

Coeur Mining (CDE), originally recommended by Carl Delfeld in his Cabot Explorer advisory, tumbled about 3% last week on no news. National Bank gave the stock an “Outperform” rating with a 12 price target, citing “stable and high-margin cash flow,” and speculating that the increased cash flow could lead to greater shareholder returns. In his latest update, Carl wrote, “This stock is driven by institutional investors that collectively own 74% of the company’s outstanding stock. Coeur is a mining company that explores gold, silver, zinc, and other related metals in the U.S., Canada, and Mexico. Unlike gold, which is used mostly as a store of wealth and in jewelry, the bulk of silver demand, about 80%, comes from manufacturers.” BUY

DoorDash Inc. (DASH), originally recommended by Mike Cintolo in Cabot Top Ten Trader, was up 6.5% this week and is fast approaching its 2021 highs above 245! Cantor Fitzgerald raised its price target from 210 to 260. Raymond James did the same and upgraded to “Strong Buy.” The online food delivery service giant expanded its drone delivery service into the Dallas-Fort Worth area. The nascent service allows Dallas residents to order food via drone delivery from either nearby or national restaurants. DoorDash had previously experimented with drone delivery in the Frisco and Little Elm areas of Texas. The stock is now up more than 85% from our entry point last August. BUY

Dutch Bros (BROS), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was up a point, from 68 to 69, on no news. There’s been no major news, although Goldman Sachs maintained a “Neutral” rating and kept its price target at 75. Shares of the fast-growing drive-through coffee chain are up more than 32% year to date but are still well off their February peak above 85. BUY

Dynatrace, Inc. (DT), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, was up about 1% in its first week in our portfolio. As Tyler wrote last week, “Dynatrace is a software company that helps large enterprises monitor and manage their increasingly complex IT environments. It is a leader in the Application Performance Monitoring (APM) space, meaning its platform ensures applications run smoothly and securely across every layer of a customer’s tech stack, from infrastructure to code.

“This comprehensive coverage means Dynatrace plays a direct role in shaping the end-user experience that many people enjoy when using common applications.

“Like many modern software companies, Dynatrace is enhancing its platform with AI-driven capabilities. These tools have fueled the growth of newer product areas, including log management (now adopted by a third of customers), infrastructure monitoring, and application security.

“A key business model strategy shift for Dynatrace is its evolution toward a consumption-based pricing model called the Dynatrace Platform Subscription (DPS). DPS offers customers the flexibility to scale their usage based on business needs, without worrying about renegotiating contracts or incurring unexpected costs.

“On the Q4 fiscal 2025 earnings call (May 14), management noted that over 40% of the customer base is now on DPS, with the customer count doubling year-over-year.

“Importantly, DPS customers use an average of 12 platform capabilities, compared to just five for those on traditional licenses. These customers also generate higher revenue, with average annual recurring revenue (ARR) of $600,000 versus $400,000 for traditional users.” The stock has been up and down this year but has recovered nicely from an early-April retreat and is creeping toward its February highs above 62. BUY

Eli Lilly and Company (LLY), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, was up about 1% this week but remains largely sluggish amidst the recent market rally. In fact, the stock is flat for the year. This was one of our best performers before the monthslong stall-out, based largely on the strength of its weight-loss drugs Mounjaro and Zepbound. Those two drugs are still crushing it, and there’s a pill version in the works that could be a game-changer. But until LLY can gain traction with investors again, we’ll keep the stock at Hold. HOLD

Freshworks (FRSH), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, was mostly unchanged this week, and remains in the 14-15 range it’s been in for two months. There’s been no news, which is a big reason for the stagnation. The company offers customer experience (CX) and employee experience (EX) software solutions and is benefiting as mid-market customers try to reduce software costs. Its AI offerings have accelerated sales, and the stock is up nearly 17% in the last year but is trading well below its January highs. BUY

Main Street Capital Corp. (MAIN), originally recommended by Tom Hutchinson in the High Yield Tier of his Cabot Dividend Investor advisory, is up from 57 to 59 since we last wrote. That’s the stock’s highest point since March. There was no news, so the bump in share price was likely market-driven. The 7.3% yield and the monthly dividend are the appeal here for this business development company. Any share price gains are gravy. Thankfully, we’ve had some of those, to the tune of a 30% gain in 15 months. Add in the high dividend, and MAIN has delivered a hefty total return thus far. BUY

Netflix, Inc. (NFLX), originally recommended by Tyler Laundon in Cabot Early Opportunities, just keeps stretching to new heights, up 6.5% this week to eclipse the 1,300 mark for the first time. Wells Fargo raising its price target to 1,500 surely helped. And the debut of Season 3 of the streamer’s wildly popular Squid Game show is likely adding to investor fervor. But in general, NFLX just continues to act like one of the best growth stocks on the market. A short-term pullback may be coming, but I wouldn’t let that deter you from buying this exceedingly reliable stock. BUY

Palomar Holdings, Inc. (PLMR), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, has had a bad month when most other stocks have fared quite well. There’s been no obvious reason why, with no news. We added this low-beta insurance stock at the beginning of June to give our portfolio some safety in case the market went south again. Instead, it’s quickly become our worst performer. No need to keep a boring insurance stock around if it’s not doing the job we hired it to do. SELL

Planet Fitness (PLNT), originally recommended by Mike Cintolo in Cabot Top Ten Trader, was up another 1% to add to its gains from the previous week. There was no news. We have a nice gain on this fitness center chain thus far. And having broken above resistance at 105 earlier this month, it’s possible the stock will continue its recent ascent. BUY

Sea Limited (SE), originally recommended by Carl Delfeld in his Cabot Explorer advisory, advanced 4% as it claws its way back to the early-June highs above 170. The stock also trades at about half its 2021 highs, even though it has now nearly tripled from our entry point 15 months ago. Sea is an e-commerce, gaming, and fintech company centered on the dynamic Southeast Asian region with a population of 700 million. BUY

Stoxx Europe Total Market Aerospace & Defense (EUAD), originally recommended by Carl Delfeld in his Cabot Explorer advisory, is soaring on Monday, up more than 8% in early trading. This ETF, the only one in our mostly stock-centric portfolio (hence the name), is a play on the strength of European stocks and Europe’s increased focus on defense spending as its economy improves. European stocks have outperformed U.S. equities so far this year, up more than 6% thus far. BUY

Tesla (TSLA), originally recommended by Mike Cintolo in Cabot Top Ten Trader, held its gains after rising nearly 9% the previous week. The long-awaited rollout of the robotaxi, in Austin, Texas, is acting as a tailwind. The company hopes the driverless taxi can compete with Google’s Waymo, which has become ever-present in some western cities like Los Angeles. Its debut comes at a welcome time for the company, when people around the world have been boycotting and even selling their Teslas due to CEO Elon Musk’s involvement in the Trump administration. And yet, TSLA shares have been resilient as always, up 46% after the early-April bottom. It remains a fool’s errand to bet against this stock. HOLD

The Williams Companies, Inc. (WMB), originally recommended by Tom Hutchinson in the High-Yield Tier of his Cabot Dividend Investor advisory, added another 3.5% this week despite the downturn in crude oil prices as fears of America’s involvement in a Middle East war have cooled. Natural gas prices mostly stayed the same, though, and that’s Williams’ bread and butter. In his latest update, Tom wrote, “Natural gas demand is highly resilient and even remained so during the pandemic. Williams also has solid growth ahead with its increasing exposure to the NGL export market. Williams delivered another solid earnings report and raised guidance for 2025 as project expansions come online. WMB will likely continue to march back toward the high and beyond unless the market rolls over again. But regardless, it should be a solid holding over the rest of the year.” BUY

Toast Inc. (TOST), originally recommended by Mike Cintolo in his Cabot Growth Investor advisory, was up a point, from 43 to 44, on no major news. Shares of the digital payments platform have been quite choppy of late but are now up about 2.5% in the last month and more than 20% year to date. If it can break above 45 resistance, it may finally gain some lasting traction. BUY

Veeva Systems Inc. (VEEV), originally recommended by Mike Cintolo in his Cabot Top Ten Trader advisory, was up 2% this week as the company expanded its cloud partnership agreement with Amazon Web Services, enhancing its same-day delivery capabilities. It’s always good to be in bed with Amazon as this $3 billion company aims to become a $6 billion company by 2030. BUY

If you have any questions, don’t hesitate to email me at chris@cabotwealth.com.

Here, too, is the latest episode of Cabot Street Check, the weekly podcast I host with my colleague Brad Simmerman. This week we welcomed on Mike Cintolo to talk about the state of the market, what to expect the second half of the year, and to give three growth stocks that are emerging as potential leaders of the newly formed rally.

The next Cabot Stock of the Week issue will be published on July 14, 2025.

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